Lease Accounting Software

Effective date:

  • Lease Accounting as per Ind AS 116 – Mandatory effective date 1st April 2019 replacing the earlier Ind AS 17

Highlights:

  • Leases are recognized in the balance sheet as a ‘right-of-use’ asset and a ‘lease liability’.
  • Provides exemptions for short-term leases and leases of low value items. User can define asset classes for availing exemption as per the asset class
  • Different modes of payment – Monthly, Quarterly, Half-yearly or Yearly either at the beginning of the period or at the end of the period can be handled by the system
  • Computation of Right-of-Use, Amortisation, Lease Liability, imputed income from interest-free deposits with complete accounting entries for the entire life of the lease
  • All Accounting entries are generated on the fly with ability to see key account balances at every reporting date
  • Disclosures provided as per the requirements of the Accounting Standard

Data upload:

  • Lease data and lease deposit data imported from a file
  • Initial indirect cost, costs of removal and restoring, lease incentives and residual value guarantee data all captured by the system
  • Input the risk-free rate and the credit rating of the counterparty to compute the imputed interest income from lease deposits with reduced or no interest

System highlights:

  • Cloud-based application with full security
  • Three User Profiles provided in the Customer Portal:
  • Accountant role – Multiple accountants can enter the data. Each accountant can view or edit the data uploaded by her/him
  • Manager role – Manager login responsible for the processed output, who can view and edit all data entered by any accountant. Manager can process the data and generate all reports
  • Auditor role – Auditor login to view all the input data and reports available in the system. Can view the entire audit trail for all transactions
  • Dashboard giving details of the Right-of-use, amortization, lease liability, imputed income and finance charges for any given lease or all leases

Lease modifications:

  • Lease modifications automatically computed by the system based on the input data
  • Impact on right-of-use asset and lease liability is generated by the system along with modifications in the amortization
  • Previously generated accounting entries are reversed, and new entries passed by the system

Implementation:

  • Transition methods – Full retrospective, modified retrospective approach #1 and modified retrospective approach #2 available on a lease by lease basis
  • Accounting entries can be exported to the user’s accounting system

Pandemic Concessions:

  • Amendments pertaining to COVID-19 concessions are incorporated into the system

Lease Accounting Software – Data Input Process

Lease Accounting Software – Data Input Process Creation of Company Super Admin is the administrative contact from RVSBELL Analytics, who will create the company and the user login ids for all the users of the application. Creation of users Three users are created by the Super Admin viz., Accountant, Manager and Auditor. All the three login ids should be created before the user starts to work with the system. If the user wants more ‘Accountant’ logins, it can be requested at additional cost and the Super Admin will create the same. Before the user starts to upload the data etc., all the login ids created …
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Lease Accounting Software Computation Process

Lease Accounting Software Computation Process Generate cash flows Based on the start date, effective date, end date, frequency of the lease, payable at beginning or end etc, cash flows for the entire period is generated as follows: Change the following data – only start from 1-4-2019 onwards Variable cashflows If you upload lease with Cash flow as “YES” then click the export cash flow. If the Cash Flow field is not ‘YES’ then the ‘Upload Cash Flow’ and ‘Export Cash Flow’ buttons will not be active. The Status of the record for which Cash flows should be updated will be shown as ‘New’. A csv file …
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Lease Accounting Software – Deposit Management

Lease Accounting Software – Deposit Management Upload Lease Deposit Deposits with sample data Import ‘Lease advance’ file Click the import data and upload the advance.csv in the given format Deposits uploaded Compute the Lease Deposit Prepare the schedule of dates first. 1. Discount factor is based on the rate given in the Advances file by adding the two fields – Let us call the sum total of these two as ‘Rate for Deposit’ 2. For the first line, where the advance amount is given the discount factor is found by the number of days from the start date to the end date in the formula: 3. For the subsequent lines, the …
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Lease Accounting Software Modification and Termination

Lease Accounting Software Modification and Termination 1. Processing is done on a quarterly basis. 2. Journal entries are passed on a monthly basis always. All entries will be dated the end of each month. Exception is the payment of lease rental and other payments which will be the actual date of such payment. 3. There may be some modifications in the lease term when we receive the data for the next quarter. 4. So every time we process the data, the first job is to check the following: New leasesExisting leases with no modificationExisting leases with modifications For a. New leases, the entire process mentioned in …
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